Company Reports

In the second quarter, Marsh saw its top-line organic growth pick up a bit sequentially, due to strong performance on the consulting side of the business.

We view Marsh as something of a tollbooth business. Its leading position in brokerage would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh's long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Marsh's first-quarter revenue growth was in line with recent results, both overall and at the segment level.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Shares of the leading insurance brokers fell mid-to-high single digits on Monday, Feb. 9, as the market reacted to reports that OpenAI had approved its first insurance app on ChatGPT.

Marsh's fourth-quarter 2025 results largely held steady with the previous quarter in terms of both top-line growth and margin improvement.

After a long period of favorable conditions, Marsh McLennan's results have come down to earth this year, and the third quarter was further confirmation of this reality.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Marsh McLennan's second-quarter results suggest the slower growth we saw in the first quarter may be here to stay.

Marsh McLennan announced that it will acquire Florida-based Excel Insurance, which provides property-casualty insurance to small businesses and individuals. This follows last week’s announced purchase of Validate Health, a healthcare analytics company.

Marsh McLennan's revenue growth slowed in the first quarter, prompting a negative reaction from the market.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Marsh McLennan has been benefiting from multiple tailwinds over the past couple of years that have pushed growth above our long-term expectations. We had seen signs that growth was starting to normalize, but the company bucked this trend in the fourth quarter, with organic year-over-year growth picking up a bit to 7%. While the result is encouraging, we still expect growth to moderate going forward and will maintain our $179 fair value estimate for the narrow-moat company. We see shares as overvalued, as we believe the market is extrapolating recent growth rates too far into the future.

Marsh McLennan has been on a strong run over the past couple of years, as multiple tailwinds pushed growth above historical levels. We’ve expected growth to normalize, and third-quarter results suggest that may be starting to happen. Overall year-over-year revenue growth in the quarter was 6%, or 5% on an organic basis. Growth has now returned to a level that is close to our long-term expectations. We will maintain our $179 fair value estimate and see the shares as overvalued. We think long-term growth prospects are modest and the market is overly focused on recent results.

Marsh McLennan announced that it will acquire McGriff Insurance Services for $7.75 billion, with the acquisition funded by cash on hand and debt financing. McGriff is an insurance broker and offers additional risk management services. We like that Marsh McLennan is sticking within its core operations and don’t think this acquisition will dilute the company’s narrow moat. We believe the integration of similar deals in the past have gone well, which bodes well for this acquisition. The consideration does look a bit rich—with Marsh McLennan paying almost 6 times revenue, well above the price/revenue multiple implied by our fair value estimate for Marsh McLennan. The company will presumably be able to take out some costs, but we’re a bit skeptical this deal will prove value-creative in the long run. However, this acquisition is not large enough to materially impact our $179 fair value estimate, which we will maintain. We see shares as a bit overvalued, as we believe the market is overly focused on recent tailwinds.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Narrow-moat Marsh McLennan delivered another set of strong results, with organic year-over-year revenue growth of 6% for its second quarter. This is a bit of a contraction from the rates we have seen recently, but growth remains modestly above our long-term expectations. We will maintain our $167 fair value estimate and see the shares as materially overvalued. While we appreciate the recent strength the company has shown, we think long-term growth prospects are modest and the market is overly focused on recent results.

Marsh McLennan produced another strong quarter, as the company is still benefiting from multiple tailwinds. This drove 9% year-over-year organic growth for the company during the first quarter, well above our long-term growth expectations. While we are impressed with the firm's ability to extend the strong growth it has seen of late, we expect a reversion to the more modest levels of growth the company has enjoyed historically. We will maintain our $167 per share fair value estimate for the narrow-moat firm and see shares as overvalued, as we think the market is overly focused on the company's recent performance.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Marsh McLennan produced a solid fourth quarter, but we see signs that growth may be normalizing. The company has been riding a number of tailwinds recently, and some of these benefits are likely starting to taper off. We will maintain our $157 fair value estimate for the narrow-moat company and see the shares as overvalued.